LOS ANGELES >> Three appellate court justices Wednesday heard arguments in the city of Montebello’s conflict-of-interest lawsuit filed against three ex-council members and a former city administrator.

The case stems from the controversial decision by the Montebello City Council in 2008 to award a 15-year, $150 million trash-hauling contract on a 3-2 vote to Athens Services.

The city in 2012 sued former Council members Rosie Vasquez, Robert Urteaga and Kathy Salazar, accusing them of approving the contract with Athens’ parent company, Arakelian Enterprises, in exchange for campaign contributions.

The city also sued former City Administrator Richard Torres, who allegedly helped negotiate the terms of the contract.

That contract was later overturned in court and that decision since has been appealed.

In the conflict-of-interest case, Los Angeles County Superior Court Judge Rolf Treu in November 2012 rejected a request from the four defendants to dismiss the lawsuit, instead allowing it to go ahead.

Frank Revere, attorney for the four defendants, Wednesday asked the appellate court to overturn the ruling.

“I don’t see any facts that anybody could rationally assume there was an expectation of a recognizable financial interest,” Revere told the justices. “There is no evidence of any wrongdoing whatsoever.”

However, Raul Salinas, attorney for the city, said there is evidence the three council members had conflicts of interest, something that’s prohibited by government code section 1090.

Athens also contributed $353,000 opposing a campaign to recall Urteaga and Salazar.

In addition, Urteaga met with a top official from Athens, suggesting the company submit a proposal to receive an exclusive trash hauling franchise from Montebello, Salinas said.

“What you have here is a conversation between the elected official and the trash hauler in exchange for self dealing,” he said. “There is no more valuable contract a city can give than a trash hauling contract.”

Revere argued that just taking campaign contributions isn’t illegal.

“Political fund-raising involves a fundamental freedom of the First Amendment,” he said.

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And state law still allows you to vote on contracts even if you have received campaign contributions, he said.

There’s also a freedom of speech issue, Revere said.

“Council members have the right to speak freely at a legislative hearing and vote as they see fit,” he said. “Otherwise, you’ll have no legislative body acting free if they’re sitting there fearing lawsuits.”

But Salinas said campaign contributions can be a bribe.

“No one will say I’m going to give $100 for your vote but there’s an understanding,” he said.

“You don’t need to know somebody took a cookie from the jar if you see crumbs on the floor.”

Salinas also said there was a direct connection between Salazar and Athens.

Justice Jeffrey Johnson wasn’t so sure that was enough proof of wrongdoing.

“You want us to take what is a wink and smile and assume something must have occurred and it meets the standard of proof,” Johnson said. “Maybe, it doesn’t.”

Salinas said that Salazar had directly taken money from Athens.

“She runs her own nonprofit,” he said. “A board member from the trash contractor was on her board and she drew a salary from that board.”

The law required her to disclose the interest and abstain from the vote, Salinas said.

But Revere said a Superior Court judge said there was no violation and the Los Angeles County District Attorney’s Office — despite receiving letters asking it to prosecute — refused.

It issued a letter saying there may be a technical violation but saw no basis for prosecuting Salazar, Revere said.

The two attorneys also disagreed on the status of Torres.

Salinas said Torres had publicly opposed awarding a contract and then changed his mind. Torres also buried the contract in what was supposed to be an “update” of Athens’ rates.

Revere said that Torres merely negotiated the contract.

“What evidence do we have that he has any recognizable financial interest?” he asked.